Russian Duma first to ratify Eurasian Economic Union treaty

By bne IntelliNews September 26, 2014

Graham Stack in Berlin -

 

Russia's lower house of parliament, the Duma, ratified a treaty September 26 that establishes the Eurasian Economic Union between Russia, Kazakhstan and Belarus. The treaty was signed by the presidents of Russia, Kazakhstan and Belarus in Kazakhstan’s capital Astana in May, 2014.

Belarus and Kazakhstan could ratify the treaty by October 7, a senior deputy in the ruling United Russia party said, according to newswires. “According to our information, ratification in Kazakhstan's lower house of parliament, the Majlis, was previously scheduled for October 1, and in Belarus’ House of Representatives of the National Assembly for October 7,” said Leonid Slutsky, chairman of the State Duma's Committee on Commonwealth of Independent States Affairs, as quoted by Itar Tass.

According to Slutsky, Russia's Vladimir Putin, Kazakhstan's Nursultan Nazarbayev and Belarus' Alexander Lukashenko will then meet in the Belarusian capital of Minsk, on October 9. “These ratifications will be symbolically completed by the meeting in Minsk,” Slutsky said.

The EEU, which comes into effect January 1 2015, creates the framework for free movement of goods, services, capital and labour, and is an extension of the Customs Union of Russia, Belarus and Kazakhstan. Membership is open to other states.

The treaty now goes to Russia's upper house, the Federation Council, for approval next week.

Divvy up

The treaty foresees the creation of institutions building on those of the existing Customs Union. They will include a Supreme Eurasian Economic Council consisting of the three heads of state; an Intergovernmental Council of heads of government; the Eurasian Economic Commission and the Court of the Eurasian Economic Union.

The Eurasian Economic Commission will be based in Moscow and will serve as the union's economic centre, while the Eurasian court will be in Minsk. Almaty, Kazakhstan's largest city - but not its capital - will play host to the EEU's financial centre, including an as-yet unspecified supranational authority to act as financial market regulator.

The two most likely countries next to sign up to the EEU are Kyrygyzstan and Armenia. Together with Tajikistan, all three have been recognized as potential future candidates and membership negotiations are ongoing.

Armenia came close to signing a free trade and association agreement with the EU earlier this year, but pulled out of doing so, apparently under pressure from Russia. In August, Russian Foreign Minister Sergei Lavrov suggested Russia would provide $0.5bn in funding to Kyrgyzstan to accelerate its accession process.

The existing free trade agreement between members of the Commonwealth of Independent States (CIS) that encompasses most former Soviet countries except the Baltic countries will continue to exist, ensuring that the free trade arrangements existing between, for instance, Ukraine and Moldova will continue.

Russia has, however, threatened to curtail the CIS free trade with Ukraine. Russia alleges that Ukraine's recently signed free trade and association agreement with the EU combined with Ukraine's pre-existing free trade agreement with Russia threatens its own market, which could be flooded with cheap EU and Ukrainian goods.

"The CIS [free trade agree therefore either becomes a poor relative of the EEU agreements for some nations, or it becomes the bridge between both EU [Deep and Comprehensive Free Trade Area] and EEU agreements at a somewhat lesser level for those ratified to both," writes Nikolai Holmov of the Odesa Talks think-tank.

 

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